What Is VBR? Vanguard Morningstar Small-Cap Value ETF
Last updated October 2026
Short answer
VBR is Vanguard Morningstar Small-Cap Value ETF, an ETF that tracks Morningstar US small-cap value index (replaced the CRSP U.S. Small Cap Value Index in 2026) at a 0.05% expense ratio. VBR is the cheapest mainstream way to own a specific academic bet: that small companies trading at low prices relative to their fundamentals outperform over long horizons. Whether that premium still exists is genuinely contested, and it has spent long stretches not working. What is not contested is the cost of finding out, which here is 0.05% a year across roughly 800 companies weighted so flatly that the largest position, Moderna, was only about 1.1% as of October 2026.
VBR is issued by Vanguard and tracks Morningstar US small-cap value index (replaced the CRSP U.S. Small Cap Value Index in 2026). It charges a 0.05% expense ratio, holds approximately $64.1B in assets under management, yields about 1.91%, and launched in 2004.
What small-cap value actually means
Two screens stacked. First, small: companies well below the large-cap range, which historically have delivered higher returns and considerably more volatility. Second, value: within that group, the ones trading cheaply against book value, earnings and cash flow.
The combination has a long history in academic finance and a mixed one in practice. Small-cap value underperformed the broad market for much of the 2010s before periods of sharp reversal. Anyone buying VBR should be clear they are making a factor bet with a horizon measured in decades, not a diversification move.
The portfolio is unusually flat
As of October 2026 the largest holding, Moderna, is 1.1%. Then Jabil at 0.7%, Atmos Energy at 0.6%, Williams-Sonoma at 0.6%, Omnicom at 0.5% and Tapestry at 0.5%. Nothing here can move the fund by itself, and Moderna reached the top only because its shares rallied hard in 2026.
Sector weights tell you more than holdings do: financials 18%, industrials 16%, consumer discretionary 13% and real estate 11% as of October 2026. Value screens systematically pull toward banks, insurers and asset-heavy industrials, and away from technology. That is why VBR behaves so differently from a broad index in any period where technology leads.
2026 has been one of the stretches where the tilt held up. As of October 16, 2026, VBR's share price was up 10.7% year to date and 15.7% over one year, with a 3-year average annual return of about 17.0% and a 3-year beta of about 0.94. It still trailed the mega-cap-led large-cap indexes over the year, which is the familiar pattern.
Passive VBR or active AVUV
The most common comparison is not another index fund but Avantis's AVUV, which screens more aggressively on profitability as well as value and charges considerably more for doing so. VBR takes the whole small-cap value slice of its index mechanically (CRSP until 2026, Morningstar since); AVUV concentrates on the cheapest and most profitable end of it.
The trade is straightforward. VBR is cheaper and more diversified. AVUV is a more concentrated expression of the same factors, which means larger deviations in both directions.
VBR holdings: top 10
Approximate weights as of October 2026. Each ticker links to its individual stock guide in Walnut.
How do I invest in VBR?
There are three common ways to get VBR exposure. Buy shares (or fractional shares) of VBR directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so VBR sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. VBR trades like a stock during market hours, so you buy it the same way you would any listed share.
New to buying funds? See how to buy an ETF, step by step.
Is VBR a good buy?
Whether VBR is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks Morningstar US small-cap value index (replaced the CRSP U.S. Small Cap Value Index in 2026), so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is VBR a buy?
The bottom line on VBR
VBR gives you Morningstar US small-cap value index (replaced the CRSP U.S. Small Cap Value Index in 2026) exposure in one ticker at a 0.05% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.
More on VBR
Whether VBR is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is VBR a buy?
VBR yields 1.91% as of October 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see VBR dividend: yield and schedule.
For what analysts expect from the companies VBR holds, its yield as a guide to income, and why no one publishes a price target for the fund itself, see the VBR forecast.
New to funds like VBR? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.
Wondering how VBR fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in VBR with AI
Connect the broker you already use and ask Walnut's AI how VBR fits what you actually hold: what it overlaps with, what it leaves you exposed to, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is VBR?
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VBR is the Vanguard Morningstar Small-Cap Value ETF, known until 2026 as the Vanguard Small-Cap Value ETF. In 2026 Vanguard moved it from the CRSP U.S. Small Cap Value Index to a Morningstar US small-cap value index, and it still holds several hundred smaller US companies screened as cheap against measures such as book value, earnings and cash flow. It charges 0.05%, holds about $64.1B as of October 2026, and launched in 2004.
What does VBR hold?
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Several hundred small companies, weighted very flat. As of October 2026 Moderna is the largest at 1.1%, then Jabil at 0.7%, Atmos Energy at 0.6%, Williams-Sonoma at 0.6% and Omnicom at 0.5%. No single holding can meaningfully move the fund.
Why is VBR so heavy in financials and industrials?
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Because value screens pull that way mechanically. Banks, insurers and asset-heavy industrials tend to trade at low multiples of book value, so any value index accumulates them: financials 18% and industrials 16% here as of October 2026, with technology at only about 11%. That sector tilt is the main reason VBR diverges from a broad index.
VBR vs AVUV: which small-cap value fund?
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VBR takes the whole index slice mechanically at 0.05%. AVUV is actively run, screening harder on profitability as well as cheapness, and charges more. VBR is cheaper and broader; AVUV is a sharper expression of the same idea, with correspondingly bigger swings either way.
VBR vs VBK: value or growth?
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They are the two halves of Vanguard's small-cap range. VBR holds the cheap end at 0.05% with financials and industrials dominant; VBK holds the growth end, weighted toward technology, industrials and healthcare. Owning both approximates the whole small-cap market, which VB does in a single fund.
How volatile is VBR?
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More than a large-cap fund, and noticeably so in downturns. Smaller companies carry more leverage and less financial cushion, and the value tilt adds cyclical sectors that suffer when credit tightens. The flat weighting spreads company-specific risk but does nothing about the factor risk.
Does VBR pay a dividend?
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It distributed about 1.91% as of October 2026, typically quarterly, which is higher than a growth-oriented fund. Value screens select for companies trading cheaply, and cheap companies often pay out more of their earnings, so the yield is a by-product of the strategy rather than its aim.
Who is VBR actually for?
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Someone who already holds a broad market core and wants a deliberate long-horizon tilt toward small-cap value, with the patience to hold it through stretches where it lags badly. It is not a starting position and it is not a diversifier in the ordinary sense; it is a concentrated bet on one factor.
What is VBR's expense ratio?
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VBR has an expense ratio of 0.05% per year as of October 2026, charged by Vanguard and deducted from the fund's value rather than billed to you separately. On a $10,000 position that is roughly $5 a year. Fees compound over time, so on a long-term holding the expense ratio is one of the few return drivers you control. It is worth comparing against other funds that track Morningstar US small-cap value index (replaced the CRSP U.S. Small Cap Value Index in 2026) before you choose.
How do I compare VBR to similar ETFs?
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Put a few fields side by side: the expense ratio (fees compound over decades), the index or strategy it tracks, the top holdings and how much they overlap with what you already own, the dividend yield, and the AUM, liquidity, and bid-ask spread that affect trading costs. For index funds, tracking error (how closely it follows its index) and tax efficiency matter too. VBR's figures are above; the full method is in Walnut's guide on how to compare ETFs.
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Walnut is informational, not investment advice. Holdings weights and fund statistics on this page are approximations stamped to October 2026; verify current figures against Vanguard's fund page or your broker before investing.